The Senex Energy Ltd (ASX: SXY) share price is rising on Friday morning following news that the oil and gas producer will sell natural gas to 29 Metals Ltd (ASX: 29M).
At the time of writing, shares in Senex are trading for $3.56 – up 0.56%. The S&P/ASX 200 Index (ASX: XJO) is 0.06% lower.
Let's take a closer look at today's news.
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The Senex share price is falling
In a statement to the ASX, Senex Energy says it has entered into an agreement with 29Metals to supply its Capricorn copper mine with 2.5 petajoules (PJ) of natural gas over 3 years.
The natural gas will be shipped to the Diamantina power station (which is owned by APA Group (ASX: APA)), which in turn will power the copper mine. The arrangement begins in January 2022.
The cost of the deal has not been disclosed, except to say it is a "fixed price" and "in line with current market prices". According to the website Trading Economics, the current market price for natural gas is US$5.05 per million British thermal units. Its price has soared 98% since the beginning of the year.
Senex says it has about 80PJ of agreements with domestic customers at the moment.
Investors aren't too enamoured with today's news, judging by the falling Senex share price.
Management commentary
Senex Managing Director and CEO, Ian Davies, said:
The Capricorn Copper mine is a critical project in the Queensland Government's Strategic Blueprint for the North West Minerals Province.
Copper in particular has a large role to play in the production and operation of next generation clean technologies such as electric vehicles, and solar and wind power sectors.
Senex looks forward to building another strong, long-term and mutually beneficial relationship that supports jobs, the economy and helps meet Australia's energy demand as it transitions to a lower carbon future.
Senex share price snapshot
Over the past 12 months, the Senex share price has increased by 36%. Year to date it is up an even larger 41%. Both metrics are faster than the ASX 200 index over the same periods.
Senex Energy has a market capitalisation of roughly $655 million.
